Bloomberg News

Murban Crude Rises to Two-Week High; Shell Buys Dubai From SK

February 24, 2012

Feb. 24 (Bloomberg) -- Abu Dhabi’s Murban crude rose to a premium above its official selling price this week to close at the highest level since Feb. 10.

Murban was up 1 cent to 3 cents over its OSP, according to data compiled by Bloomberg News. It was assessed at 13 cents below on Feb. 20. Lower Zakum, also produced by Abu Dhabi, increased 1 cent to 3 cents below its OSP. That was the smallest discount in two weeks. Dubai crude gained 75 cents to $121.52 a barrel, the highest since Aug. 2008.

Royal Dutch Shell Plc bought four Dubai partial cargoes for April from South Korea’s SK Innovation Co., according to a survey of traders who monitor the Platts pricing window. The European oil company paid $121.50 a barrel for two lots and $121.55 a barrel for the other two. SK Innovation has sold at least 30 of the 25,000 barrel parcels so far in February, accounting for 750,000 barrels.

Dubai crude’s backwardation, when the price for prompt deliveries is greater than for later shipments, was little changed. Swaps for March were $1.80 cents a barrel more than in May, according to data from PVM Oil Associates Ltd., a London- based broker. The price difference, known as a timespread, has more than doubled since the start of the month, a sign of stronger refiner demand for prompt oil.

The April Brent-Dubai exchange for swaps, which measures the European benchmark contract against the Persian Gulf grade, fell 6 cents to $3.87 a barrel, according to PVM data. The May contract was also down 6 cents to $3.67.

Vietnam Tenders

PV Oil Co., Vietnam’s state-owned oil-marketing company, offered as much as 450,000 barrels of Rang Dong crude for April to May loading, said three traders who participate in the market, declining to be identified because the information is confidential. The parcels are for April 3 to April 9 and April 25 to May 2 loading. Bids are due Feb. 29.

Oman futures for April delivery rose 84 cents to $122.74 a barrel on the Dubai Mercantile Exchange at 5:47 p.m. Singapore time, with 1,648 contracts traded. The settlement price was $122.72 at 12:30 p.m. in Dubai.

The refining margin in Singapore, or the theoretical profit from processing a barrel of Dubai crude into fuels such as gasoline and diesel, averaged $3.57 through Feb. 23, compared with $4.83 for the last three months, Bloomberg data showed.

--Editor: Alexander Kwiatkowski, Mike Anderson.

To contact the reporter on this story: Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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